For the vast majority of 2015 and 2016, writing up recaps of industrial distributors and suppliers’ quarterly earnings reports wasn’t
enjoyable. An industrial recession
had a negative impact on almost all
companies on our Big 50 List, and in
some cases that impact was drastic.

The story in those reports was
always the same: year-over-year
sales and profits had declined across
most or all business segments, and
the company would mention how
those declines were due to weakened
customer demand. This was especially
evident for distributors that rely heavily on oil and gas customers — some
of which saw sales decline more than

20 percent each quarter for more
than a year.

Nowhere were these market trends
more exemplified than our annual
Survey of Distributor Operations. Our

2016 survey showed that only 42 of
respondents said sales increased compared to the year before, while 68
percent respondents said “economic
conditions this year” were a primary
concern.

I’m happy to report that our 2017
survey — with the same sample size
— provides much more optimistic
vibes. A majority — 56 percent — of
respondents said sales have increased,
while only 39 percent of respondents
picked economic conditions as
a primary concern. These are
considerable positive differences
that illustrate an improved industrial
economy through 2017’s first quarter,
as our survey results were pulled in
late March.

Those sales and concern stats are
the only ones I’ll tease here, as you
can find many more in our survey section of this issue (starting on page 14).

This year we’re going with a muchsmaller survey report in print, whilemaking the full report downloadablelater in May on ww.inddist.com. Besure to check it out to see how dis-tributors are reacting to the improv-ing market, and see a variety of othertrends and key factors impactingindustrial distributors, from supplierrelations to e-commerce utilization.

I’m glad to once again be writing up positive distributor earnings
reports. MSC’s year-over-year sales
improved in Q2 for the first time since
Q4 2015, and the company expects
continued growth in Q3. Fastenal
likewise had Q1 year-over-year sales
growth of 6. 2 percent, and its March
daily sales growth of 8. 4 percent
was the company’s best month since
February 2015.

Even better than the numbers are
the positive thoughts I’ve heard in
recent conversations with prominent
distributor executives. I’ve spoken
with Grainger CEO D.G. Macpherson,
Motion Industries CEO Tim Breen and
Fastenal CFO Holden Lewis — each
who spoke of an uptick in customer
activity, which they expect to
continue.

Granted, industrial economic
conditions are still some ways below
where they were this time two
years ago before oil prices and rig
counts nosedived. But they’ve been
consistently improving ever since and
most market analysts expect further
improvement throughout 2017.

Along with our Survey of Operations, also featured in this issue is
a Distributor Profile (page 8) on
Liverpool, NY-based industrial hose
distributor JGB Enterprises, which is
ramping up its hose assembly capabilities and expanding further into
retail. JGB was No. 50 on our 2016 Big
50 List, and you can see its executive
team braving a major March snowstorm in this issue’s cover photo.